Wednesday, January 2, 2013

SatoshiDice - A Test Case for Bitcoin Gambling

Early on, in was apparent that the online gambling scene had the potential to benefit from Bitcoin. Obviously I was not alone in that thinking, as dozens of Bitcoin gambling sites seemingly sprung up overnight, most of them looking like they were coded by five year-olds or Nigerians, or Nigerian five year-olds.

The majority have gone the traditional route of offering tried and tested games like poker, blackjack, or slots, but some have utilized the unique properties of Bitcoin to truly change the way people gamble online.

Let me draw an analogy to try to explain exactly what SatoshiDice has achieved. Imagine for a second that you have a bank account with Chase, or any other bank that offers online banking, and you are logged into your online account. On the side of the page you are given the option of making bets. For example, you can send up to $3000 to another account, and instantly receive $12000, with a 24.41% chance of winning. Or you can send $2000 to another account and instantly receive $3914, with a 50% chance of winning. There are many other betting options available to you with a very slight house edge, and profits appear immediately in your bank account and are available for spending.

You could probably see how this might be addictive to a gambler, and tempting to anyone who has the option. If you have a Bitcoin wallet, this is reality.

So, how well has the site done? Very well... EXTREMELY well.

In the month of December alone, SatoshiDice's profits amounted to an impressive 17,206 BTC or $230,000 USD, with total profits on the order of 40,000 BTC or over half a million dollars.

Transactions to and from SatoshiDice notoriously represent a large percentage of all Bitcoin transactions. As an example, alone there have been 700,000 transactions to/from the 50% odds betting address.

SatoshiDice has essentially laid the path for a new type of online gambling, one where you do not have to give a site your personal information and where deposits and withdrawals are near instantaneous.

With Bitcoin, transaction fees are less than a penny, regardless of the amount transferred.

Bitcoin transactions are not reversible. This means that online casino operators do not have to be concerned with chargebacks, and can therefore allow users to clear bonuses much quicker than in traditional online casinos.

Gambling sites can pass on their savings to players, increase your odds of winning, and offer better bonuses.

Credit cards charge "cash advance" fees when you fund online casinos. Those fees do not exist with Bitcoin.

Bitcoin transactions are virtually anonymous, and are not associated with a geographic location.

Withdrawals to your account are now instantaneous. No more waiting, no more checks, no more fees.